Concerning Stock Index Options, Which of the Following Statements Is

question 10

Multiple Choice

Concerning stock index options, which of the following statements is false?

• A) Index options appeal to speculators due to the leverage they offer.
• B) Investors can write index options.
• C) If exercised, the holder of a stock index call receives the underlying stock.
• D) Index options are settled in cash.

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Definitions:

Summer Rings

Annual growth rings found in trees in temperate zones that are typically larger and lighter in color, reflecting faster growth during the summer months.

Guttation

The exudation of drops of water from the pores of plants, usually at the tips or edges of leaves, due to root pressure in a humid environment.

Transpiration

Transpiration is the process by which water vapor is lost from plants to the atmosphere, mainly through the stomata in leaves.

Root Pressure

The pressure in xylem sap that occurs as a result of the active absorption of mineral ions followed by the osmotic uptake of water into roots from the soil.